The Procedure For Using An Offer In Compromise With The IRS
Posted on: 25 June 2020
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Out of all the methods you can use to settle tax debt with the IRS, an offer in compromise (OIC) is one of the best options. An OIC is a tax-settlement strategy that the IRS allows in certain situations. You will never know if it will work for you unless you try. If you are tired of the IRS hounding you for money, here are the steps you must take to use an OIC.
1. Talk to a Tax Problems Lawyer
For starters, you should not attempt an OIC yourself. Instead, search your area for a law firm that offers tax problem services. A lawyer with experience handling tax problems can help you in many ways. This type of lawyer knows IRS tax laws and the options for settling tax debts. If you want to find a solution for your tax problems, hire a lawyer from this field.
2. Fill Out the OIC Form
The lawyer will review your situation to see if you likely qualify for an OIC. The IRS is particular about accepting OICs, but your lawyer will know what the odds are in your case. If the lawyer feels that there is a good chance the IRS will accept it, he or she will help you fill out the form.
3. Send the IRS the Form and the Fees
After applying, your lawyer will send it to the IRS with the necessary fee. The IRS charges a fee for all OIC applications, and this fee is non-refundable. The IRS requires this to ensure that people apply for these only when they are serious about working out a plan. Applying for an OIC does not mean that the IRS will accept it, though. The IRS must evaluate the application and your situation before providing an answer to your request.
4. Comply with the IRS's Requests
After submitting the application, the IRS may ask for additional documentation. If this occurs, you must give the documents to your lawyer. Your lawyer will forward them to the IRS for you.
5. Wait for the Answer
The final step is to wait. It may take the IRS a few weeks or longer to process your application and give you an answer to your request.
If the IRS approves your OIC request, you should start making payments. You only have two years to pay your debt in full after the IRS accepts the agreement. Talk to a tax lawyer if you have any questions about settling your tax debt.